No-Clicks-No-Fee Web Ads Arrive

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No-Clicks-No-Fee Web Ads Arrive

We already have spam. Is the Web ready for Ginsu Knife-like direct-response ads? It'll have to be, thanks to a new advertising model unveiled Friday by DoubleClick Inc. But not everyone is thrilled by the Internet marketing company's brilliant new idea to offer get-no-results-pay-no-fee ads.

DoubleClick Direct lets advertisers pay only for what they can prove they got - live customers ready and willing to buy their goods. Using models like cost-per-click, -per-lead, -per-sale, or -per-download - while the banner ads themselves run free of charge - DoubleClick is hyping that the new service is a risk-free way for direct marketers to try out Web advertising.

"There is still not a product to appeal to the direct-response industry," said Elliot Fishman, project manager for DoubleClick Direct, referring to the marketers who currently depend on direct mail and telemarketing to get out the word on their products. The makers of "NordicTrak or Ginsu Knives, to use a cheesy example, just don't pay for traditional advertising," he said, but they might try Web-based advertising if it worked on the direct-response model they are used to.

"This is merely another client group interested in advertising on the Internet," agreed Scott Schiller, vice president of advertising at Sony Online Ventures, who pointed out that direct response has been around since the 1940s. "This is an encouraging sign," he added, acknowledging that the more advertising models there are to sell, the more likely one is to sell them to diverse advertisers. However, not all of his colleagues see the transference of an old model onto the new medium in such a positive light.

"It takes all the risk out of media creation and doesn't leave us much of a business," said Rich LeFurgy, senior vice president of advertising at ESPN/ABC News Internet Ventures. Content providers create audiences and advertisers pay to be associated with them, he explained, while the direct-response model "certainly stretches the definition of advertising."

Others worried that by tying a content provider's revenues to ad performance, the model begs publishers to worry about how effective an ad will be, and even to get involved in creating the ads. "You're not just selling ads, you're evangelizing the medium, and you have to go the extra mile," explained Evan Neufeld, online advertising analyst at Jupiter Communications. "It's in the spirit of giving advertisers what they want, but you can't give away the farm."

Caroline Vanderlip, CEO of Softbank Interactive Marketing agreed. "I really applaud DoubleClick for always trying to reach, but here they may have reached too far," she said, adding that the direct-response idea "has dangerous implications that negate the true value of the Web as a medium for multiple marketing objectives."

Finally there's the question of how this move might diminish the role of regular old banner ads. Will advertisers still be willing to pay for an ad, even if you don't click on it? "If you sell ads other than by CPM, you're saying banners have no value," argued Jupiter's Neufeld, who pointed out that about 98 percent of banner ads aren't clicked on.

But DoubleClick, which is maintaining its Internet branding and advertising network, argues that the new Direct service is simply an alternative, not a replacement, for traditional advertising. "We don't see this as cheapening branding," said Fishman. "We're expanding the pie."